Boeing, which is deeply involved in the 737 Max quality crisis, announced a comprehensive management reorganization on Monday. The CEO, commercial aircraft business leader and chairman will all be replaced. Boeing issued a statement saying that CEO Dave Calhoun will leave the company at the end of 2024 and chairman Larry Kellner will not seek re-election. Stan Deal, head of the commercial aircraft division, will step down immediately and will be replaced by chief operating officer Stephanie Pope.
The personnel changes reflect the crisis surrounding Boeing's quality and safety that shows no sign of abating and customer dissatisfaction is growing. Kellner, Calhoun and Deal are the highest-ranking employees to leave the company since an "inline" door fell off an Alaska Airlines 737 Max 9 in mid-air in January.
Boeing CEO Dave Calhoun will leave at the end of 2024, Chairman Larry Kellner will not seek re-election, and Stan Deal, head of Boeing's commercial airplanes division, will retire immediately.
After the Alaska Airlines incident exposed Boeing's production problems, Calhoun and Deal faced increasing criticism from customers, and directors continued to pressure Boeing to reorganize its senior management. The skepticism came to a head last week, when airline chiefs asked the board to hold a meeting without Calhoun present.
This move to bypass the CEO is a sign to investors and executives that the airline is losing patience with its top brass.
The leadership shakeup was finalized at a weekend board meeting, people familiar with the matter said. People familiar with the matter said the matter had been discussed for months, but because the proxy statement had been delayed for weeks, the company wanted to resolve the matter quickly without further delay.
In particular, Kellner wants to ensure a transition plan for the chairman and CEO positions is in place before the annual shareholder meeting, a person familiar with the matter said.
"While it's generally not something to celebrate when someone loses their job, we think Boeing's board may have done a smart thing," Vertical Research Partners analyst Robert Stallard told clients on Monday. "Many of Boeing's customers, suppliers and other stakeholders have arguably lost confidence in the company, and Boeing's relationship with the Federal Aviation Administration and the National Transportation Safety Board (NTSB) is strained."
Former Qualcomm CEO Steve Mollenkopf, who has been a member of Boeing's board of directors since 2020, said he will serve as the lead independent director responsible for the search for a new CEO.
According to a person familiar with the matter, Stephanie Pope is one of the potential CEO candidates. Other candidates under consideration include General Electric CEO Larry Culp, Boeing director and Carrier Global CEO David Gitlin, Boeing supplier Spirit Aero Systems Holdings Inc. CEO Patrick Shanahan, and American Airlines Chairman Greg Smith, a former Boeing CFO.
Representatives for Gitlin, Shanahan and Smith did not immediately respond to requests for comment. In an interview in February, Culp said he "looks forward to serving the company as Boeing's most important partner and supplier" when asked if he would be interested in becoming Boeing CEO. General Electric declined to comment.
Calhoun wrote in a letter to employees, "I have been discussing this matter for some time and discussed it with the board of directors, and now is the right time for Boeing CEO transition. The world is watching us, and I believe that with all the lessons learned, we will get through this and become a better company, working together to build on the glory of the past few years."
“Very necessary”
The outspoken head of Ryanair Holdings welcomed Monday's decision, calling it "very necessary." Other major airline customers are more cautious, with Delta Air Lines, United Airlines and Southwest Airlines promising to work with the new team.
SPEEA, the union representing more than 19,000 Boeing and Spirit employees, issued a scathing statement saying the problems exposed by Boeing's top management were systemic. Executive director Ray Goforth said that if the company's leadership does not recognize the failures and fully commit to solving these problems, things will not develop in a good direction.